Car Washes Added to Kroger Gas Stations

by Wendy Toth

CINCINNATI - Kroger Co. is starting to expand an automatic car wash operation that compliments its gas stations.

The latest in the initiative is expected to open in August in Grove City, Ohio, according to Kroger’s partner Skilken, a Columbus, Ohio developer that has a 50-year relationship with the retailer.

“During one of our meetings with Kroger, it came out that they had been looking to partner up with a car wash company, but hadn’t found anyone,” Skilken President Ken Gold told SN. Kroger had been trying for many years with several different companies, but couldn’t come to an arrangement, he said.

“That’s was all I needed to hear,” Gold said. “Kroger gave us an opportunity to come up with a concept and it has worked perfectly.” The resulting Ken’s Car Wash, founded by Gold, has a brick exterior, many windows, “gorgeous architecture” and whenever possible is located adjacent to the fuel center, Gold added.

The first of the car washes opened in November in Delaware, Ohio, and another opened in Mansfield, Ohio, in December. Eight more are in “some form of entitlement or construction,” Gold said. Five of the eight will be in Ohio and three are located in Kroger’s Delta division, which covers Arkansas, Mississippi and Tennessee.

Beyond that, Skilken is working with the retailer to plan more car washes in Kroger’s Delta division and its Great Lakes division, which covers Ohio, Michigan and West Virginia. “We feel the model works in many states and although we don’t know where it will go exactly, we hope it goes up throughout Kroger’s marketing area,” Gold said. Kroger now has a total of 608 gas stations across all divisions.

“People are already driving 15 minutes to get to the existing car washes,” Gold said. They are designed so that customers can buy a car wash along with their gas, paying for it at the fuel pump and then “come right across to get your car wash,”he said. The washes range from a $6 “soft touch” to an $11 “ultimate.”

The architecture is meant to compliment Kroger stores, as well as to appeal to their primary customer base of women. “Sixty percent of our customers are women so we want them to feel secure and safe by having the windows in the units,” Gold said.

Gold would not provide financial details of the partnership and Kroger did not respond to SN’s request for comment.

The Ken’s Car Wash website states that the business is a separate entity from the Kroger Co.

Kroger Adding Car Washes

CINCINNATI - The Kroger Co. here is adding automatic car washes to its growing network of fuel centers.

The program is a partnership with Columbus-based developer Skilken Co. The alliance was sparked when the supermarket chain had difficulty finding a partner in the car wash business, according to local press reports, Skilken’s successful 60-year track record of building stores for Kroger promted it to step in and start its own car wash business.

The first Ken’s Car Wash-named for Skilken president Ken Gold, opened in November at the Westfield Shopping Center in Mansfield a month later.

A third Ken’s Car Wash is scheduled to open in August at the Buckeye Grove Shopping Center in Grove City. Eight more car washes are on tap for the coming months, five in Central Ohio and three in Kroger’s Delta Division, which includes Arkansas, Mississippi, and Tennessee.

Dale Hollandsworth, Kroger’s director of integrated communication, was quoted as saying that the grocer wanted to add car washes to its fuel centers as an extra service for customers.

Pittsburgh-based Giant Eagle Inc. is already immersed in the car wash business via WetGo car wash stations, located adjacent to roughly 25 of its GetGo convenience and fuel stations.

Skilken, Kroger add car washes to checkout line

By Dan Eaton / Business First

Skilken Co. hopes its new venture with the Kroger Co. will be anything but a wash.

The Cincinnati-based grocery operator has been searching for a chain of automatic car washes to pair with its growing network of gasoline stations. But when the supermarket chain had difficulty finding a match, Skilken, a Columbus-based developer with a long history of building stores for Kroger, stepped in by starting its own.

A third Ken’s Car Wash, a Skilken subsidiary, is scheduled to open in August at the Buckeye Grove Shopping Center in Grove City. The first opened in November at the Westfield Shopping Center in Delaware, followed by one in Mansfield a month later.

“I never thought this would be my main focus of life after 30 years in development,” said Skilken President Ken Gold, founder of Ken’s Car Wash. “We’re an opportunistic entrepreneur. We heard they were seeking out a marketing partner to compliment their fuel centers.”

Eight more car washes are in the works - five in Central Ohio and three in Kroger’s Delta Division, which includes Arkansas, Mississippi and Tennessee.

Dale Hollandsworth, Kroger director of integrated communication, said the grocer wanted to add car washes to its fuel centers as an extra service for customers. Given the nearly 60-year history with Skilken, when the Columbus company pitched the idea of being Kroger’s car wash partner, the association “seemed natural,” he said.

Kroger isn’t the only supermarket chain with the idea, though.

Pittsburgh-based Giant Eagle Inc. has two WetGo car washes paired with its GetGo gasoline stations in Central Ohio, at its Lewis Center and Bethel Road stores. There are 25 car washes in the company.

Mike Duffey, a Giant Eagle spokesman, said the grocer has no plans for additional car washes in the area.

Kroger: Skilken hopes to build nationwide

Detailing the plan

Gold said discussions began in June 2005, when he spoke with a Kroger executive about the concept. The company gave Skilken 60 days and like the result enough to give Ken’s Car Wash a test run.

“Now that we have a few models up, we’ll see how they run, tweak them,” he said.

Hollandsworth said there was talk of putting the Kroger name on the car washes, but as part of the marketing accord the agreed to use the Ken’s Car Wash brand.

Gold outlined the plan to Kroger’s national real estate group and he hopes Ken’s Car Wash could be tabbed for a national rollout if the area ventures are successful. Kroger runs 608 gas stations.

“We feel we could do 50 locations a year,” Gold said, but for the immediate future the expectation is about 15 a year.

Kroger operates 2,477 stores in 31 states, under a variety of nameplates, including Kroger and Kroger Marketplace, Ralphs, Fred Meyer, Smith’s and Fry’s. Hollandsworth said the Great Lakes division, which includes Michigan, Ohio and West Virginia has 264 stores, 60 of which run fuel centers.

Gold declined to say how revenue would be split between Ken’s Car Wash and Kroger in the agreement, but said the car washes would be owned and operated by Ken’s, which would foot the bill for the estimated $1 million cost to build each unit.

Hollandsworth declined to share revenue projections.

Gold said the company literally looked around the world for a manufacturing partner before picking Istobal SA, a Spanish business. The system’s so-called friction wash uses less water and fewer chemicals and employes a softer synthetic cleaning apparatus, rather than cloths or brushes, he said.

Gold said high gasoline prices aren’t a worry and the car washes have been successful regardless of the other potential strains on the industry.

“We’re new to this,” he said. “We don’t know what a down market is.”

Kroger Announces Partnership with Ken’s Car Wash
New Car Wash Locations Slated to Open in 2006

COLUMBUS, Ohio (Date) – Drivers who fill up at Kroger fueling stations will soon be able to drive away with a clean car as a result of a partnership between Kroger and Ken’s Car Wash, a new high-tech car wash facility. Ken’s will open car wash facilities near Kroger fueling stations at 12 Kroger stores within the Great Lakes Division (Michigan, Ohio and West Virginia) by the end of 2007, with the first Ken’s Car Wash opening near the Houk Road Kroger store in Delaware, Ohio on Friday, November 3rd.

According to Bruce Macaulay, President of Kroger’s Great Lakes division, a second location is already under construction at the Mansfield Lexington Avenue store.

“Kroger customers will appreciate the convenience of having Ken’s Car Wash at the same location where they shop and purchase gas,” said Macaulay. “They will also like the fact that the Spanish-made equipment Ken’s Car Wash uses is more effective than equipment utilized at other car washes—and it is more environmentally friendly in its use of power and detergents.”

Kenneth B. Gold, President of Ken’s Car Wash, indicated that Kroger fueling stations were the logical choice for this partnership.

“Kroger is already committed to the idea of providing superior service and putting customers first,” said Gold. “The Kroger fueling station locations are easily accessed and convenient for drivers.”

Gold added that Kroger and Ken’s Car Wash conducted research for more than a year to determine the ideal car wash experience for Kroger customers.

Headquartered in Cincinnati, Ohio, Kroger is one of the nation’s largest retail grocery chains. At the end of the second quarter of fiscal 2006, the Company operated (either directly or through its subsidiaries) 2,477 supermarkets and multi-department stores in 31 states under two dozen local banners including Kroger and Kroger Marketplace, Ralphs, Fred Meyer, Food 4 Less, King Soopers, Smith’s and Smith’s Marketplace, Fry’s and Fry’s Marketplace, Dillons, QFC and City Market. Kroger also operated (either directly or through subsidiaries, franchise agreements, or operating agreements) 773 convenience stores, 418 fine jewelry stores, 608 supermarket fuel centers and 42 food processing plants. For more information about Kroger, please visit our web site at www.kroger.com.

Ken’s Car Wash is a subsidiary of Skilken, a real estate development firm headquartered in Columbus, Ohio. Development and operation of Ken’s Car Wash will continue the 55-year relationship already in place between Kroger and Skilken.